Tag Archives: Engels

Young people are rising up around the world, but not in America

Last weekend, a Maybach limousine pulled up to the Venetian casino and resort in Las Vegas. Out stepped Sheldon Adelson, billionaire Republican donor, for his four-day Republican convention. Donors and politicians, from Chris Christie to Scott Walker and Jeb Bush, shook hands and exchanged promises among the gleaming lights of the most gaudy city in America.

It’s a story that we’ve heard so often it’s beaten us into a stupor: wealthy businessmen sliding their arms around our politicians and co-opting the political process. It’s not even surprising anymore. But it should be; it should piss us off.

Already long gone are the heady days when thousands gathered in New York City’s Zuccotti Park and around the country. The leaves have since settled and in a lot of ways things are back to normal. We have crushing student debt at the tune of $1 trillion, education is unaffordable, there is a lot of work to do but (paradoxically) few jobs and new policies that could help our generation are languishing in Congress. Myopic politicians are more concerned with the next election than doing what’s right for our futures.

“Workers of the World, Unite. You have nothing to lose but your chains!”

So ended one of the most revolutionary political documents ever penned. And while the world has seen myriad revolutions — most recently in Latin America, the Middle East and Ukraine — revolutionary activity in Western Europe and the United States has never been sustained. So where is the revolution to enact change and usher our generation into a better tomorrow? Where is the battle cry to secure our future?

Jesse Yeh looks out across the UC Berkeley campus. He does just about anything to avoid debt, using the university’s library instead of buying textbooks, scrounging for free food at campus events and occasionally skipping meals. Image Credit: AP

If complaints were kindling, our generation would have a bonfire going. We will likely see slower economic growth, more unemployment and greater inequality than our parents. For all the social progress, retrograde attitudes remain powerful. The government feels more and more an extension of the free market, rather than a bulwark against it. And global warming, still denied by large swaths of the population, threatens not just economic growth, but also ecological collapse. Our current course could cause the earth to warm by as many as six degrees Celsius, which would create millions of refugees, stir up conflict and dramatically increase the incidence of natural disasters.

Why, then, have we not launched a sustained, revolutionary movement to wrest back control and set us on a better course? The most prominent movement, Occupy Wall Street, produced much in the way of slogans. But compared with the Tea Party or the leftist movements of the ’40s and ’60s, it has done little to change policy.

Here are three reasons we have not seen a revolution, even though it’s sorely needed:

Money has become political power.

One important factor is that economic power increasingly influences the political sphere. A recent Demos report, Stacked Deck, finds that Adelson and his wife gave more money in 2012 to influence elections than the combined contributions of the residents of 12 states.

Research by Larry Bartels finds that individuals with higher socioeconomic status have more influence on legislative outcomes than the poor and middle class. Martin GilensDorian WarrenJacob HackerPaul Pierson and Kay Lehman Schlozman have all recorded similar findings — in politics, money talks. A recent study finds that, sure enough, members of Congress are far more likely to meet with donors than constituents.

Sheldon Adelson listens as New Jersey Gov. Chris Christie speaks during the Republican Jewish Coalition Saturday in Las Vegas. Several possible GOP presidential candidates gathered as Adelson, a billionaire casino magnate, looks for a new favorite to help in the 2016 race for the White House. Image Credit: AP

When money talks, it doesn’t speak for us.

This problem is compounded by the fact that the wealthy don’t have the same priorities as the rest of us. Benjamin I. Page, Larry M. Bartels and Jason Seawright find that the very wealthy are far less likely than the general public to believe that “government must see that no one is without food, clothing or shelter,” and that “the government in Washington ought to see to it that everyone who wants to work can find a job.”

These divergences, combined with the fact that the wealthy are far more likely to be politically active because they are more likely to see results, tilts the economy toward the interests of the wealthy.

The quintessential example is the minimum wage, which 78% of Americans believe should be “high enough so that no family with a full-time worker falls below official poverty line.” However, only 40% of the wealthy agree — and the minimum remains stubbornly below the poverty line.

The wrong narrative has taken hold.

Money also shapes narratives and ideology. Baruch Spinoza, a 17th century Dutch philosopher, argued that “those who believe that a people … can be induced to live by reason alone … are dreaming of a fairy tale.”

We see the world through our ideology and what’s taken hold is the idea that the free market will give us what we deserve and that’s fair. But it’s not fair. This ideology often does not reflect the interests of the poor, but rather those who shape the narrative: those with money and power. A young economist, also known as Karl Marx, noted in 1848, “The ideas of the ruling class are in every epoch the ruling ideas.” If we’re not here to help create an equal and fair society, then what the hell are we doing?

To see the power of wealth in shaping perspectives, we can turn to new research by Andrew J. Oswald and Nattavudh Powdthavee. Compared with those who did not win the lottery, the researchers find that lottery winners in the U.K. are more likely to switch their political affiliation to the right after winning and believe that current distributions of wealth are fair. The rich are biased toward believing that the current society is just (called the “just world hypothesis”).

To take one example of how much our narratives have changed, it’s worth remembering that Americans once believed in high taxes on estates to ensure high levels of opportunity and competition. Americans did not want to live in a Jane Austen society of wealthy and snooty aristocrats and prided itself on the fact that the wealthy had earned their wealth.

Lamenting on the death of this model, Richard Hofstadter wrote, “Once great men created fortunes; today a great system creates fortunate men.” The Waltons and Kochs, parasites living off their parent’s work rather than creating their own fortunes, are examples of how the old story of the “self-made man” is increasingly out of date. Yet it sticks around because politicians keep repeating it, members of the media keep broadcasting it and suddenly we’re all talking as if a tale worthy of Hollywood is somehow fact.

There’s another disturbing narrative that’s closely linked to the others: economic growth comes from the wealthy (“job creators”) and growth is the palliative for inequality. While the former was always dubious, there was a time when economic growth was broadly shared (see chart). However, the ’90s and 2000s produced ample growth that accrued largely to the richest members of society. The wealthiest 1% have also accrued 95% of the benefits of the current recovery. These benefits aren’t serving the wealthy because they work harder, but rather because they own assets (like stocks) and the Bush tax cuts dramatically increased the returns to such assets. There was a time when the old story that economic growth benefited everyone was true, but it no longer reflects reality.

It’s time for a new story.

How we’re going to get there.

Sadly, until recently there has been no real resistance to the power of money and false narratives. Democrats and Republicans have generally adhered to a neo-liberal consensus that government is bad and markets are good. It was Bill Clinton, not Ronald Reagan, who declared the “end of big government.”

Few politicians are willing to argue that government is good, that the social safety net needs to be expanded, not contracted, and that “freer markets” may not solve our most grievous social ills. Since the rise of “New Democrats,” who are happy to shred social security and Medicare in the name of deficits and are unwilling to take a stand on climate change, there has been no real “left” in the country.

Traditional bastions of leftist resistance, like unions, found little support from the Carter and Clinton White House. Regulations in the public interest, like those enacted to prevent another Great Depression or protect the environment, were rolled back with equal fervor by Democratic and Republican administrations. Young people realize this, and Pew Data show we are far more skeptical of the idea that there are major differences between the Republican and Democratic parties.

We are disenchanted with concentrated economic and political power and feel, rightly, that alone, they can do nothing. We find few politicians representing our interests, and almost none outside the grip of economic elites. We are bombarded with false narratives, but have yet to see a new one take hold. This very alienation from the channels of power only makes our movements more ineffectual — we have many Sartres, but few Debses or Naders actually fighting for change.

Image Credit: AP

It’s time for a different narrative.

The story we’re going to build and spread using the world’s greatest communications platform questions the idea that we can have unlimited growth in a finite world. This story will remind us that the engine of economic growth has always been a strong and open middle class. This story will reject racism, xenophobia, sexism and homophobia in favor of an open and tolerant society. This story is a uniquely Millennial story.

It is our story. It is the story of a generation that will be worse than its parents. It is the story of a generation looking for jobs where few exist. It is the story of a generation burdened by debts we did not create. It is the story of a generation on the verge of taking over. This here is planting season.

We will have to fight to make our story heard. We will have to mobilize to make it happen. We have occupied parks; let us occupy statehouses, campuses and the media. For too long we have, in the words of John Mayer, waited on the world to change. But, as Frederick Douglass noted, “Power concedes nothing without a demand.” We cannot simply imagine a better world, we must make it happen.

It begins with a new story.

Originally published on Policymic.

Conservatives defend inequality out of self-interest — nothing more

Conservatives have justified inequality for decades, arguing that it is an inevitable byproduct of capitalism and broadly beneficial. This intellectual edifice has begun to collapse.

Supply-side economics rest on the assumption that the wealthy drive economic growth, and that by reducing taxes on them, we can unleash latent economic potential. In fact, however, investment is driven by demand, not supply (a point acknowledged by the relatively conservative Martin Feldstein). If there are viable investments, they will be made regardless of tax rates, and if there are no investments, cutting taxes is merely pushing on a string. Thomas Piketty and Emmanuel Saez, two top economists on inequality, find no correlation between marginal tax rates and economic growth.

Recently, two IMF papers confirmed what Keynesians like Joseph Stiglitz have long argued: Inequality reduces the incomes of the middle class, and therefore demand. This stunted demand means fewer opportunities for investment, stunting growth.

Add to this growing body of research the fact that a robust defense of inequality is increasingly difficult to muster when every other OECD country has far lower levels of inequality than the United States. Greg Mankiw’s defense of the 1 percent was widely decried, because a large swath of research shows that the rise of the 1 percent did not come from natural economic forces, but rather rent-seeking.

The evidence is clear: The economic benefits of inequality have been massively oversold. Inequality is, in fact, a detriment to growth. So why has the right not conceded the argument?

The answer is class interest.

“Class interest” does not mean that the wealthy are nefarious schemers. Instead, it means there are various cognitive biases that lead them to justify and perpetuate inequality. For instance, Kris-Stella Trump conducted experiments in which participants were asked to solve anagrams in a high inequality scenario (the winner received $9 and the loser $1) and a low inequality scenario (the winner got $6 and the loser $4). When asked what a fair distribution would look like, the high inequality group preferred an inequality of $5.54 ($7.77-$2.23) while the low inequality group preferred inequality of $2.30 ($6.15-$3.85). She concludes: “Public ideas of what constitutes fair income inequality are influenced by actual inequality.” Inequality perpetuates inequality.

Paul Piff finds that the wealthy feel more entitled to their earnings and are more likely to show personality traits typically associated with narcissism. Recent research by Andrew J. Oswald and Natavudh Powdthavee finds that lottery winners in the UK are more likely to switch their political affiliation to the right, and also more likely to believe that current distributions of wealth are fair. As people get richer, they think that tax policies favoring the rich are fair — not because of the macro-economic benefits, but because of how they benefit me.

These cognitive biases, rooted in class distinctions, have deep implications. As a young economist argued in 1846, “The ruling ideas are nothing more than the ideal expression of the dominant material relationships.” Benjamin I. Page, Larry M. Bartels, and Jason Seawright examined the policy preferences of the very wealthy and found that they generally fall in line with their class interests. The wealthy were far less likely than the general public to believe that “government must see that no one is without food, clothing, or shelter,” or that minimum wage must be “high enough so that no family with a full-time worker falls below official poverty line,” or that “the government in Washington ought to see to it that everyone who wants to work can find a job.”

This is not meant to demean the policy preferences of the wealthy — only to examine the motives. For too long, the wealthy have couched their economic ideas as being broadly good for the country, but in fact, de-unionization, capital market liberalization, and austerity benefit themwhile leaving the rest of us far worse off. It’s time that we were all honest about why we support the policies we support.

Now of course, not everyone who supports conservative economic policy is wealthy. Indeed, there is a large literature devoted to the question why the working class supports policies against their own interests. Engles calls this phenomenon “false consciousness,” writing to Franz Mehring, “the real motive forces impelling him remain unknown to him; otherwise it simply would not be an ideological process.” Thomas Frank proposes that working-class conservatives are swayed by social issues. Ian Haney Lopez argues that racial animus still plays a role. Rick Perlstein notes the power of identity politics. The American ethos of upward mobility certainly plays a role; truck drivers in Tallahassee vote for tax breaks on Wall Street believing that they may someday posses enough wealth that an estate tax might affect them. John Steinbeck noted the power of aspiration, writing, “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”

But when it comes to wealthy conservatives who favor economic policies that hurt many Americans: Bartels’ previous investigation of economic and political power finds, unsurprisingly, that those with a higher socioeconomic status have more influence on legislative outcomes. Martin GilensDorian WarrenJacob HackerPaul Pierson, and Kay Lehman Schlozman have all recorded similar findings. It seems obvious, but it is important to connect these dots: Not only do the wealthy have interests divorced from the broader interests of society, but they also have the political heft to turn those interests into policy.

It is considered rather gauche to discuss class today, and the inequality debate is therefore situated in a purely theoretical realm. Liberals are constantly confused and aggravated about why the preponderance of evidence that austerity doesn’t work (while stimulus does) and that inequality harms society is lost on a large portion of conservatives.

Well, let’s face it: Those who support austerity and inequality are not really about “trickle-down” economics or “efficiency and equity.” They are protecting the interests of the upper class.

As Jonathan Swift warned, “It is useless to attempt to reason a man out of a thing he was never reasoned into.”

Originally published on The Week.